The outlook for global oil demand will rise to a record high of 102.3 million barrels per day this year according to the International Energy Agency (IEA), which predicts demand will surge as the faster-growing economies in the developing world continue to expand.

The IEA sees global oil demand growing 6% between 2022 and 2028 bringing it to 105.7 million barrels per day (bpd), up 5.9 million bpd compared to 2022 levels, according to its medium-term market report, which was released this week. It predicted the petrochemical and aviation sectors would support the strong demand.

The report noted that over the six-year period to 2028, three-quarters of the increase would arise from Asia, with China being surpassed by India as the main source of growth in 2027. Demand for oil in North America and Europe would be in a “contractionary mode” for the majority of the period due to energy transition policies, according to the agency.

China, which has found itself in the midst of a post-pandemic rebound in oil demand over the first half of 2023, will see its demand growth slow from 2024 onward, according to the projection. The report noted, however, that the key driver of global oil demand growth would be the global petrochemical sector, with over half of the growth between 2022 and 2028 and nearly 90% of the growth compared with pre-pandemic levels accounted for by liquified petroleum gas (LPG), ethane, and naphtha. It is expected there will be strong growth in the aviation sector as airline travel returns to normal following the restrictive era of the pandemic.

Meanwhile, the IEA predicted that annual demand growth would fall from 2.4 million bpd in 2023 to 0.4 million bpd in 2028. The report notes it would demonstrate “a historic pivot towards lower-emission sources.”

IEA Executive Director Fatih Birol said, “The shift to a clean energy economy is picking up pace, with a peak in global oil demand in sight before the end of this decade as electric vehicles, energy efficiency and other technologies advance.”

The energy body noted, there was an “unprecedented reshuffling of global trade flows,” and that the emergency release from the Strategic Petroleum Reserves of IEA members had helped ease supply restrictions tremendously.

The agency also predicted investment in oil and gas exploration and production to hit $528 billion by 2023, the highest level since 2015 and an 11% surge over last year’s number.